Politically based stories and commentaries
Due to the provocative actions of Russia, NATO has had to scramble their planes an unusual number of times over the 2014 year. And I do not believe that counts the numerous times the Russians have ‘strayed’ over the Canadian-U.S. boarders. The following Reuters report is more detailed on this subject.
How pervasive is this ISIS group you might ask. Apparently it depends on which day you ask — they are growing FAST! They are now twelve countries and growing. This ‘rouge’ group has now become a good part of the entire middle-east!
The following article goes into which countries are now officially part of ISIS and the current status of that ‘organization’.
The vast majority of the American public are totally unaware of Saul Alinsky, much less his relationship to our president. However the connection should be much clearer if you heard the statements made by our president regarding Ferguson and the video comments you hear below.
Obama stated on air this week that although we follow the law in this country, some people do not agree with the findings of the court and they have a good reason to not agree — implying that a racial component exists. But when you listen to Alinsky’s views, it should be no wonder that a president who was effectively trained by this guy should think the way he does.
Please listen to the Alinsky interview done in 1967 while thinking about Ferguson. Then ask yourself if we’re meeting his goals in this country..? Do the people rioting in the streets protest for things, or just steal them!?
A friend of mine recently approached me at one of my lectures on communist activities within the United States. Heard about my talk from others who had listened at other venues. He indicated that he was intrigued by my topic because he was writing a book on our lost culture due to the communist influences.
He subsequently asked that I include one of his chapters on my blog so that others could read how successful this movement has been. This is a very important topic to both of us. Please read the following comparatively brief text on the subject.
CULTURAL MARXISM by John R. Cassata
The last half of the 20th century has seen a major transformation of American culture. Fifty years ago American neighborhoods were safe and decent. Most public schools were safe, drug free and did a good job of educating children. Blue-collar fathers brought home middle-class incomes, enough to purchase a modest house and buy a new car every four or five years. Moms could stay home with the kids. Almost everyone belonged to some branch of organized religion and regularly attended worship services. Illegitimacy was rare and divorce was generally frowned upon. Television shows reflected sound, traditional values. What happened to that America? How did it become the hedonistic, politically corrupt and immoral country that exists today? Did that American culture just mysteriously evaporate over the past fifty years?
That America did not just disappear. Although several factors have worked synergistically to transform our culture, one profoundly effective transformative initiative has been at work. This highly focused effort combined a detailed strategy with patient and meticulous execution to transform America into a social order that the Founders could never have envisioned. Because this agenda was intentionally kept hidden few people are aware of it. This essay briefly summarizes this hidden agenda and its impact on America. We must wake up and recognize what has been happening in our country and begin to take it back. “…it is the hour now for you to awake from sleep.”
THE FRANKFURT SCHOOL
An old political ideology underlies ongoing efforts to fundamentally transform America. It was brought here many years ago by a small cadre of German intellectuals. The ideology is Marxist communism and the goal is the implementation of Cultural Marxism utilizing a strategy called “critical theory.” The objective is to transform America into a Marxist communist state. Prior to world War I, Marxist theorists believed that if war broke out in Europe, people would arise and overthrow the existing governments, replacing them with a Marxist social utopia. By the end of the war, Marxist theory had been proven wrong as citizens had patriotically defended their existing governments. According to historian William S. Lind (see the article “Who Stole Our culture?”)1, post-war Marxist leaders struggled to understand what went wrong and why their anticipated Marxist revolution failed to materialize.
Antonio Gramsci in Italy and Georg Lukacs in Hungary, two leading Marxist theorists, independently arrived at the same answer to that question. Gramsci and Lukacs concluded that Christianity and Western cultural norms prevented the proletariat (common, working-class citizens) from recognizing that their best interests lay in Marxist communism. Gramsci and Lukacs determined that a Marxist revolution would be impossible unless Christianity and Western cultural values were degraded and destroyed. That objective, the destruction of Christianity and accepted cultural norms, drives the development and implementation of Cultural Marxism to the present day.
In 1923 a group of German intellectuals established the Institute for Social Research at Frankfurt University, a think-tank modeled after the Marx-Engles Institute in Moscow. According to Timothy Matthews in his article “The Frankfurt School: Conspiracy to Corrupt”,2 the institute came to be known as the Frankfurt School and was home to notable sociologists and political philosophers like Herbert Marcuse, Theodor Adorno, Eric Fromm, Leo Lowenthal, Jurgen Habermas, and Max Horkheimer. These intellectuals reasoned that political and cultural revolution, rather than violent armed rebellion, were the means by which Cultural Marxism would be implemented throughout Europe and across the globe.
Owing to Hitler’s hatred for Marxism, the Frankfurt School became a major target when the National Socialist Party (the Nazis) came to power in 1933. Because the Institute’s most prominent members were Jewish, they closed the Institute and emigrated from Germany to the United States. The key members landed in New York and were aided by Columbia University in getting re-established. From there they migrated to other major U.S. universities including Princeton, Brandeis, and California at Berkeley. The new target of the Institute would be America.
Horkheimer and his staff made significant progress in advancing Cultural Marxism. They accepted Antonio Gramski’s hypothesis and concluded that America’s cultural institutions were an extremely important factor in shaping society. Horkheimer realized that the working class and organized labor would likely not catalyze the hoped-for Marxist revolution on their own. New standard bearers would be needed.
Frankfurt School members decided that Western culture could be destroyed by comingling Marx with Freud. They reasoned that a major impact of Cultural Marxism would be to “liberate” Western culture from a state of psychological repression. They cleverly surmised that psychological conditioning would be much more effective than attempting a top-down imposition of Marxist ideology.
With Hitler gone after the war, Horkheimer and others returned to Germany where they reestablished the Institute in Frankfurt. Herbert Marcuse, however, remained in the U.S. where he continued his efforts at joining Marxism with Freudian concepts. “Critical theory” was the concept and strategy that emerged. In simplest terms, it called for harsh, unceasing criticism, and ultimately the destruction or radical transformation, of every traditional American institution, starting with the building block of American society, the family.
CRITICAL THEORY
Critical theory is a concept developed by key members of the Frankfurt School. Its objective is the destruction of all traditional institutions, including the family itself. It is based on the thinking of two brilliant Marxist communist protagonists, Antonio Gramsci and Georg Lukacs. Both Gramsci and Lukacs concluded that Christianity and Western culture made it impossible for the proletariat, every day working people, to embrace Marxist communism. This, they reasoned, was due to Western civilization’s 2000 year history rooted in Judeo-Christian faith and long established cultural traditions. They concluded that Marxism would not be possible without the destruction of Christianity and Western culture.
Georg Lukacs made a determined effort to de-Christianize Hungary by undermining sexual ethics. He became the Deputy Commissar for Culture in 1919 in the short-lived Bolshevik Bela Kun regime. Linda Kimball has described Lukacs’ rationale in her article “Cultural Marxism”. According to Kimball, Lukacs believed the family and the Church could be destroyed if Christian sexual ethics could be undermined in children. He began a radical sex education program in Hungarian schools. He provided graphic literature instructing youth in free love (sexual promiscuity) while prompting them to reject Christian moral ethics, monogamy, and parental and church authority. This values-absent radical sex education and encouragement to defy traditional authority led to rampant delinquency among Hungarian youth during his short tenure in Hungary.
Antonio Gramsci was born in Sardinia in 1891 and studied philosophy and history at the University of Turin. While there he became a Marxist and joined the Italian Socialist Party. The growth of Italian fascism forced him to move to the USSR. Once there he became disillusioned with the promise of a working-class paradise, a promise being enforced by terror, mass murder and fear of Stalin’s labor camps where many supporters of communism were sent. Gramsci returned to Italy to fight against Mussolini’s fascist regime. He was soon imprisoned where he wrote his Prison Notebooks, which outlined a new Marxist strategy.
Fr. James Thornton has summarized Gramsci’s life and his thinking in his article “Gramsci’s Grand Plan.”4 Gramsci realized that faith in God and love of family and country were more meaningful to ordinary people than communist theories of class struggle. Because Christianity was so thoroughly integrated into daily life, and had been so for well over a thousand years, it represented an impenetrable obstacle to the formation of a Marxist society. Gramsci concluded that a better approach would be a subtle attack aimed at transforming society gradually over a period of a few generations. This strategy required control over the consciousness of the people. Such control could be achieved by first obtaining control of the organs of culture – churches, educational institutions, newspapers, magazines, the electronic media, serious literature, music, the visual arts, etc. Gramsci realized that calling for an armed revolution as had occurred in Russia would be unsuccessful. His strategy called for the destruction of Christianity and Western culture through a “long march through the institutions” with political power the last thing to be grasped.
Using this conceptual framework, critical theory emerged from the Frankfurt School intellectuals as the means of implementing Cultural Marxism in America. Linda Kimball describes critical theory as an ongoing and brutal assault via vicious and relentless criticism of Christianity, Christmas, the Boy Scouts, the Ten Commandments, sexual morality, the military, and virtually all of America’s cultural and societal institutions and traditions. Essentially critical theory is psychological bullying, a psycho-political battering-ram used by Frankfurt School acolytes to force Americans to submit to the will of Marxist ideologues. Critical theory challenges traditional American norms in multiple target areas including: family, education, drug use, music, television, popular culture, sexual morality, and the media. Political Correctness is a direct application of these critical theory concepts.
POLITICAL CORRECTNESS AND ITS TARGETS
The Frankfurt School intellectuals concluded that Western culture, values and Christianity must be destroyed before Marxism could take hold. Their early leader, Max Horkheimer, was uncertain who would instigate that destruction and facilitate the Marxist revolution in America. Herbert Marcuse provided the answer: a coalition of students, ethnic and racial minorities, feminist women, homosexuals, and others who felt “victimized” by American society. The strategy would employ critical theory, Political Correctness, and multiculturalism as principal tools. Marcuse redefined the word “tolerance” in the context of Political Correctness and these “victimized” groups. When “victimized” groups call for “tolerance” today, they mean tolerance for all Marxist ideas and movements, and intolerance for the traditional cultural norms that stand in their way.
The student rebellion of the 1960’s, driven by opposition to the Vietnam War and a new-found freedom from the reproductive consequences of extramarital sex, presented a historic opportunity to advance Cultural Marxism in academe. Marcuse, who coined the phrase “make love not war,” did not let the opportunity pass. Soon college students and faculty were being demonized and punished whenever they crossed the ideological lines established by feminists, homosexual-rights activists, ethnic/racial minorities, atheists, or any other “victims” groups. Atheism, Darwinism, and Humanism were elevated above Christianity on the premise that “science” somehow trumps “scripture.”
Frankfurt School intellectuals did not advertise Political Correctness as a form of Marxism. Many of the Baby Boom generation, especially university-educated elitists, embraced Political Correctness and its less obvious Marxist underpinnings. These elitists now occupy influential positions in universities, government agencies, and non-governmental organizations and they share the “blame America first” mentality, e.g., blame for the rise of radical Islam, for exploitation of third world countries, for environmental destruction, etc.
Theodor Adorno, a key Frankfurt School thinker, promoted the idea of the “authoritarian personality.” This concept claims that Christianity, capitalism, and the traditional family foster oppressive and racist tendencies. It alleges that masculinity and femininity are not essential sexual differences, but arise from life-function differences determined by society. This theory provides the basis for radical feminism, its “war on women” theme, and other elements of the feminist agenda. Adorno taught that upholding traditional American values and institutions was racist and oppressive.
Political Correctness largely guides the content and messages coming from the entertainment industry. When Hollywood’s Cultural Marxists want to “normalize” something like homosexuality, they produce movies and programs with politically correct characterizations where the only normal white male is a homosexual. Through such psychological conditioning people absorb the lessons of Cultural Marxism without even knowing it.
The Boy Scouts became a target of homosexual-rights activists, ultimately allowing homosexuals to be scout leaders after succumbing to threats of lawsuits and the loss of sponsorships by politically correct corporations. So-called “anti-discrimination statutes” have been enacted at the state and local level to enforce politically correct tolerance and deny Christians their First Amendment rights. Community traditions have also been attacked via lawsuits demanding removal of memorial crosses, the Ten Commandments, the words “under God” from the Pledge of Allegiance, and Christmas nativity displays, among others.
Many single-issue groups, politicians, and members of the judiciary sympathetic to their ideas, promote Cultural Marxism through identity politics. These groups include radical feminists, racial and ethnic extremists, anti-war ‘peace’ activists, animal rights groups, radical environmentalists, and the LGBT lobby. They operate through organizations such as the Gay Straight Lesbian Education Network (GSLEN), the ACLU, People for the American Way, Sexuality Information and Education Council of the United States (SIECUS), Planned Parenthood, Code Pink for Peace, American Atheists, the Freedom From Religion Foundation, the North American Man Boy Love Association (NAMBLA), the Southern Poverty Law Center, and others. They all reach politically correct tolerance but refuse to tolerate any person, group, or institution that espouses traditional cultural principles and norms.
OTHER TACTICS
In addition to Political Correctness, Cultural Marxists employ other ways to destroy American culture, values and Christianity in their drive to implement a Marxist society. The radical Saul Alinsky provided his strategy in his book Rules for Radicals.
To Alinsky, politics is war. His followers are at war and complete destruction of the political opposition is the objective, there is no middle ground. Enemies must be destroyed, demonized and discredited. He taught that the preferred approach is to work from within, attack the [political] system at its foundation while avoiding overt confrontation. Alinsky explains: “Any revolutionary change must be preceded by a passive, affirmative, non-challenging attitude toward change among the mass of our people.”
His Rules for Radicals recommends various power tactics. Some of the most effective are:
Alinsky realized that when opponents are pressured to abide by every law, religious tenet and political pledge, in other words to live up to their own book of rules, humans inevitably fail. This failure provides the opportunity to discredit not only the political opponent but the system [capitalism] in general. He also provided very effective tactics: “Ridicule is man’s most potent weapon. It is almost impossible to counterattack ridicule. Also, it infuriates the opposition, who then react to your advantage.” He explained: “You can insult and annoy him [the enemy], but the one thing that is unforgivable and that is certain to get him to react is to laugh at him. This causes irrational anger.” Alinsky provided advice to local activists: “…the community organizer…must first rub raw the resentments of the people; fan the latent hostilities to the point of overt expression.”
Some of Alinsky’s prominent disciples include the former community organizer Barack Obama who taught workshops on Alinsky tactics in Chicago. Another Alinsky disciple is Hillary Clinton who authored “There Is Only The Fight – An Analysis of the Alinsky Model” as her BA Honors Thesis at Wellesley College in 1969. Hillary Clinton’s use of the politics of personal destruction is well documented, characterized by destructive and demonizing personal attacks on political opponents, a brutal application of critical theory.
The “Strategy of Manufactured Crisis” is a tactic developed by Richard Andrew Cloward and Frances Fox Piven, a husband and wife team of radical socialist professors at Columbia University. Forcing change through orchestrated financial crises is the essence of their concept. Former White House Chief of Staff Rahm Emanuel clearly appreciates that, once advising: “You never want a serious crisis to go to waste. And what I mean by that is it’s an opportunity to do things you think you could not do before…”
The housing bubble of 2007, caused by issuing millions of home loans to unqualified borrowers, was one such crisis. It precipitated the Troubled Asset Relief Program (the TARP bailout), thereby increasing the national debt by nearly a trillion dollars. The 2008 stimulus package added almost another trillion to the national debt. According to CBO estimates, Obamacare will increase the debt even higher in future years.
When interest rates rise, which they inevitably must, interest payments on this debt will starve all other federal expenditures. It is estimated that if interest rates increase a mere 1 to 2 %, the interest on the debt would equal the entire GDP. Cultural Marxists hope this will cause massive domestic unrest and collapse the economy and the government. Amidst the anticipated rioting and social chaos the existing political system could then be toppled. Progressive and socialist politicians, assisted by plutocrats such as George Soros, Warren Buffett, Tom Steyer, Michael Bloomberg and others, will then be able to remedy the failures of capitalism by imposing a Marxist socialist political system to restore order and economic stability.
A STATUS REPORT
Over eighty years have passed since the founding of the Frankfurt School. Establishing a marxist communist society in the United States became its goal. The chosen strategy was not armed revolution but rather the destruction of the fundamental institutions of American society from within.
Although it is extremely late, Americans must recognize the objective for what it is – the fundamental transformation of America into a Marxist communist state. Recall that Antonio ramsci believed that Marxists could ultimately destroy Western culture and Christianity through control of the organs of culture – churches, schools, newspapers, magazines, electronic media, serious literature, music, the visual arts, etc. – over the course of a multigenerational “long march through the institutions.” Political power would then be within grasp. An assessment of Gramsci’s “long march through the institutions” is sobering.
Gramsci’s “long march through the institutions” has been very successful. Most of the “organs of American culture” have succumbed to the ideology of Cultural Marxism. Our challenge is to stop the fundamental transformation of America and restore traditional American norms, onstitutional principles, and Judeo-Christian values before it is too late.
NOTES:
You may be one of those people kicking things and complaining that only an idiot would vote an incompetent into the Whitehouse. You may also rationalize that those ‘uneducated dummies‘ are probably responsible.
Well, unfortunately, the following video is just an example of how well college students are informed regarding their country’s leadership. If this doesn’t disgust and scare you, nothing will.
And people ask me if we have a chance of turning this country around..?! As the kids would say, “NOT!!”
Who’s your vice president? Really difficult question huh?
I would venture to guess that the vast majority of people in America today really don’t understand the real impact of ‘Obama Care’. There are, in my opinion, two key reasons for this lack of understanding.
First, people are too often caught up in their lives (work, family, etc.) oblivious to current events. They are often too engaged in light entertainment or some other form of feel good diversion.
But secondly, and more importantly, many are unaware that the Affordable Care Act (ACA) has not really been fully implemented yet.!! Because our current emperor has chosen to pass ‘38 presidential orders‘ since the bill has passed in the senate, most of the real bad news has been postponed until January of 2017!
Currently most conventional citizens of this country work for a living. As such, they mostly receive health insurance from their employers. Although they may think their premiums are high now, they haven’t seen anything yet!!?
When the ACA is fully implemented, insurance rates will ‘necessarily skyrocket’ due to the ‘Cadillac tax’ defined in the ACA. (And like all other taxes, this one will also go up, not down.) That tax is approximately 40% on top of whatever your coverage is defined by the federal government. (A very scary thought indeed.) Why? Because they believe anyone who has ‘better’ insurance than most (the poor and/or unemployed), they need to subsidize those unfortunate people.
What this will mean is two major changes in our society — loss of jobs, and loss of exceptional health care. Both will be a detriment to our current way of life. If you do not believe me, please read what professor Case Mulligan has to say on the subject.
And by the way, no we won’t get a mulligan on this issue. We will be stuck with an eight on a par 3.
CASEY MULLIGAN, a professor of economics at the University of Chicago, received his Ph.D. in economics from the University of Chicago in 1993. He has been a visiting professor at Harvard University and Clemson University, and is affiliated with the National Bureau of Economic Research, the George J. Stigler Center for the Study of the Economy and the State, and the Population Research Center. He has written for the Chicago Tribune, the Chicago Sun-Times, the New York Times, and the Wall Street Journal, and is the author of three books, including Side Effects: The Economic Consequences of the Health Reform.
The following is adapted from a speech delivered on October 24, 2014, at a Hillsdale College Free Market Forum in Indianapolis, Indiana.
The topic of my talk today is the economic side effects of the Affordable Care Act (ACA), sometimes referred to as Obamacare. Since most of the economy has to do with labor and work, that’s where I’ll start. But, first a caveat. I’m an economist, and I’m going to talk about some parts of this complex law that have an impact on the labor market. Other parts of it relate to health and medicine, and because I’m not a doctor or a biologist, I’m not going to speak to those parts. From an economic or labor-market perspective, I’m going to explain how the costs of the ACA outweigh its benefits. But I can’t measure or estimate its effects on health care. I leave that to others.
The key economic concept required to understand the labor market effects of the ACA is what economists call “tax distortions.” Tax distortions are changes in behavior on the part of businesses or households for the purpose of reducing their taxes or increasing their subsidies. We call them distortions because they don’t occur for real business or real personal reasons. They occur because of the tax code. A prime example of a tax policy that creates distortions is the ethanol subsidy—technically it is a credit, not a subsidy—whereby gasoline refiners are subsidized on the basis of how many gallons of gas they produce with ethanol. Because of this subsidy, businesses change the type of gas they produce and deliver, people change the type of gas they use—which affects engines—and corn is used for ethanol instead of as feed or food. Nor do the distortions stop there. Arguably, food prices are increased due to the reallocation of corn to different uses—and when food prices are higher, restaurants and households do things differently. There are distortions economy-wide, all for the chasing of a subsidy.
To be clear, just because taxes cause distortions doesn’t mean that we should never have taxes. It just means that in order to get the full picture when it comes to policies like an ethanol subsidy or laws such as the ACA, we need to take into account the tax distortions in order to ensure that the benefits we are seeking exceed the costs.
So what are the tax distortions that emanate from the ACA? Here let me simply focus on two aspects of the law: the employer mandate or employer penalty—the requirement that employers of a certain size either provide health insurance for full-time employees or pay a penalty for not doing so; and the exchanges—sometimes they’re called marketplaces—where people can purchase health insurance separate from their employer. The mandate or penalty is intended, of course, to encourage employers to provide health insurance. And the exchanges are where the major government assistance is provided, since those who purchase insurance in an exchange typically receive a tax credit. As I’ll explain, taken together, the penalty on employers and the subsidies in the exchanges add up to a tax on full-time employment—a tax that you pay if you work full time but not if you work part time or don’t work at all. And the problem with that, of course, is that by taxing full-time work—which is the same as subsidizing part-time work and unemployment—you get less of the former and more of the latter two.
How does this full-time employment tax work with regard to the employer mandate? As I mentioned, the penalty applies only in the case of full-time employees and only to employers that don’t offer health coverage, and it applies only in those months during which those full-time employees are on the payroll. If an employee cuts back to part-time work, the employer no longer has to pay the penalty. The dollar amount of the penalty doesn’t depend on whether the employee is rich, poor, or middle class—if he works full time, the employer must either provide insurance or pay the penalty. And the penalty is indexed to health insurance costs, so every year those costs increase more than the economy and more than wages, the penalty will increase more than the economy and more than wages.
The current penalty is usually described as $2,000 per year per full-time employee. But it’s really more than that, because the penalty, unlike wages, is not deductible from business taxes. So in terms of a salary equivalent, the penalty is closer to $3,000 a head. Needless to say, this penalty reduces competition in the labor market: It discourages employers from competing for full-time employees—which, if you’re an employee, is a bad deal. Also there are a lot of employers who are not going to pay the penalty because they don’t meet the size threshold of 50 or more employees, and employees are going to suffer because these small employers won’t want to become large employers and therefore subject to the penalty.
Furthermore, this mandate or penalty—and by this time it should be clear that we can think of it as a tax on having a full-time employee—disproportionately harms low-skill workers. Think about it this way: How many hours does a worker have to work each week to produce the $3,000-per-year of value to justify keeping his job or being hired? For a minimum-wage worker, that comes to eight hours a week, all year round—one day of work a week for the government due to the ACA alone. Higher-skilled employees can obviously produce $3,000 worth of value in less time, so the penalty will have less of an impact on them.
What of the tax distortions that come from the subsidized health insurance exchanges or marketplaces? To begin to think about this, imagine paying full price for your health care. How does full price work? Well, you pay the full price. The health care provider doesn’t look at your tax return and adjust the bill accordingly. So we would never call paying full price for health care an income tax of any kind. Or imagine there is a discount on the full price—for instance, 30 percent off for everybody, regardless of income. In that case it’s still not an income tax. No matter how much you earn, you pay the same price. But what if the discount (or subsidy) is tied to your employment situation? Not to your income, but to your employment situation. That’s how the exchanges work. If you have a full-time job with an employer that offers coverage—which is the case for most employees in our economy—you don’t get the subsidy offered through the exchanges. If you want to get the subsidy, you need to become a part-time worker or spend time off the job. In other words, this discount, too, is a tax on full-time employment. Of course, no politician ever calls it a tax. But when you are in a group of people that doesn’t receive a subsidy that people in another group receive, that’s a tax.
So far I have oversimplified things, because there isn’t just one subsidy for everybody in the exchanges. The subsidy depends on your income. So there’s also an income tax built in. The more you earn, the less of a discount you get. Indeed, if you earn enough, the discount disappears. The folks analyzing this law in Washington made the mistake of focusing only on the income-tax aspect of the subsidy. There will be only eight million people in the exchanges, they figured, so eight million people now have a new income tax. That’s no big deal, they thought. They were oblivious to the fact that they were implementing a full-time employment tax on the majority of American workers. In all of the economic analyses of the ACA, there was no mention of this full-time employment tax—despite the fact that it’s the single biggest tax in the law.
In describing the size of this tax, again I find it useful to think in terms of how many hours per week somebody has to work to create enough value to replace the government subsidy he is losing because of his full-time status. There are a number of full-time workers who may have to work ten, 20, or even 30 hours a week to create the value they would get for free if they worked part time or didn’t work under the ACA. In the old days, working part time meant you earned less, and your family had less to spend than if you worked full time. Under this new system, on the other hand, if you have a family of four and make $26 an hour, dropping to part time can actually improve your financial condition by qualifying you for well over $1,000 per month in subsidies through the health care exchanges—an amount that exceeds what you would make by working the extra eleven hours per week. This is an economically perverse situation.
We have decades of research showing that when you tax something, you get less of it. So if you tax labor, you get less labor. By that I mean on average—I don’t mean that every worker responds to every labor tax. That’s obviously not the case. But on average, if you tax labor you get less labor. As a result of the ACA, then, we are going to have fewer people working and less value created overall.
Nor will the loss of productivity end there. As with the ethanol example, there will be more and more tax distortions from the ACA as it continues to roll out. Businesses will change the way they do business, whether it’s by bending over backwards to stay below 50 employees or by having more part-time employees and fewer full-time employees—not because these policies create value or satisfy customers, but because they avoid penalties or enhance subsidies. The Chicago Cubs baseball team changed over to more part-time employees this past summer, and as a result there was a day when the grounds crew couldn’t handle the weather—reducing the value of the game for the fans in general. Incentives and disincentives in the tax code ripple through the economy in unimaginable ways.
This has not been well understood. Some analysts, for instance, have argued that not many employers, relatively speaking, are going to end up paying the penalty, so the harm of the penalty will be limited. And that’s just wrong. Adam Smith pointed out in The Wealth of Nations that if there’s a type of employment that’s evidently either more advantageous or less advantageous than other types of employment, so many people would crowd into it in the former case, or desert it in the latter case, that its advantages would soon return to the level of the other types. In terms of the ACA, whereas only some workers will experience the penalty directly, it will be felt across the economy because workers will move out of the penalized businesses—and customers will do the same, since those penalties are passed on to them in the form of higher costs. We’ll all experience it. Economists and politicians who looked at this law made the mistake of basing their analyses on models in which nothing matters except what happens directly to the individual worker and his employer. That is not how economics works.
*****
In summary, the ACA has three major taxes in it. Two are taxes on full-time employment and the other is a tax on income. They may be implicit, they may be hidden, politicians may not call them taxes, but that’s what they are. Their economic impact on workers varies widely, affecting low-skill workers the most. They create all kinds of productivity problems and will have visible and permanent effects on the economy. I have estimated that employment will be three percent less over the long term because of the ACA, and that national income—or GDP, if you like to think of it that way—will be two percent less. If you look at the productivity costs alone—forgetting the fact that there will be a number of people not working anymore—they come to $6,000 per person who gets health insurance because of the law. And I’m not beginning to count the payments needed for health care providers.
In conclusion, I can make you this promise: If you like your weak economy, you can keep your weak economy.
Anyone who’s been awake over the last year knows about the NSA’s monitoring of everyone in this country (or they should know). Their data storage facility in Utah is capable of holding unbelievable amounts of information on everyone in this country — for years!
Although, some do not believe this sort of thing is happening… for real. Well, you should ask Sharyl Attkisson. She has a story that should curl your hair. The following video at the beginning tells of her experience as an investigative reporter and how she has looked into the Bengazi affair. More importantly, toward the end of the interview they show her own film of our government controlling her computer at home and erasing information from it. You really should watch this stunning video.
It is understandable that corporations have the motivation to survive, just like any other human. However, like their human counterparts, they should consider the ‘other guy’ as well as themselves.
As a continuation of my recent article ‘Living and Working in the U.S.A.‘, I received an update from the friend who sent the email included in that article. Just when you think you are totally shocked at how a corporation could be so calloused and impersonal, you see even worse behavior.
His update (paraphrased for security reasons) goes something like this:
After working a little more than 15 hours per week all year, they were told that their salary (hourly wage) would be cut by 30%, effective immediately, until January.
In their notification, they were told that this action was of a ‘confidential nature’ and that they could not share it with anyone inside or outside of IBM. In short, if the tree falls in the forest and no one is told, I guess the tree really didn’t fall..?
I guess the main reason I enter this article is to inform the public that corporate America is really in trouble. If one of the top bluechip corporations in this country behaves in this manner, one should ask who else takes such actions. And, how much of a recovery do we really have?
And for those of you who invest in IBM, you should find the following article by Forbes to be of import.
You’ve heard the politicians discuss this subject on radio and TV. But why would it be bad? Ted Cruz explains in the brief video below. Although he approaches the subject from a practical standpoint, I would argue the politicians want to quiet the opposition so that they will only hear the propaganda the government wants us to hear! Let’s hear it for those Stalin wanna-be’s. “Don’t taz my message bro!”
We constantly hear how the economy is improving and things are going to be great any day now. And those of us who are still working are happy with our situation. If we’re retired, we’re probably not happy with interest rates and our income — not to mention the cost of living. (But hey, the CPI is till way below 2%, right?!)
In 1993 I was working for one of the top IT service bureaus in the U.S. Although we were doing great, the corporation wasn’t. Once things got desperate enough, they sold the IT division off via an outsourcing contract to IBM to whitewash their books — and it worked… for awhile.
So, one day I had my old badge taken and I was given a shiny new IBM badge. I thought, “Great this should be a good deal in the long run. Right?” Not so fast, it was about that time that IBM hired Lou Gershner as their new CEO (aka, the ‘hatchet man’).
Shortly after he started his ‘house cleaning’. In 1993 IBM had 400,000 employes world wide. Of them, 250,000 were inside the U.S. When Lou was done, he had cut 150,000 employes!! Wow! Those were lean days!
Since, IBM has grown back to 400,000 employes. However there are now only 60-90K within the U.S. (depending on who you ask). BUT, there are rumors afoot suggesting they intend to cut another 28% of employes within the U.S.!!! And people wonder why our economy is stalling..?!
The narrative below is from an email I received recently from a guy who I worked/consulted with (remotely). He once made about the same salary as I, but got laid off for over two years. He was subsequently called back at half his salary with no benefits!! But, he was at least glad he had stopped the hemorrhaging from his 401K to pay bills. Now today, he has been cut back to part-time employment and is back to struggling with day to day expenses.
My point is, he does not count when it comes to ‘ reporting unemployment‘. Read his update from him below (as an example) and learn the fate of thousands of people within this country (who’s stories are not reported) and ask yourself, how will these people survive in the near future?!
I’ve been working 32-hour weeks most of the year. I managed to get a full 40-hour week only three weeks this year (it was only 13 weeks last year). Then in mid-September, as part of cost cutting, I was told to stop support of all of the internal systems (there were well over 100 separate mainframe systems involved). My management escalated this decision to a fairly high level They said “Nope. And if things break, they break. So be it.”
But it gets even better. I was also told I could not fill the week with the commercial accounts I support. I can only work the average of what I billed to commercial the past quarter. So, since the first of October, I am limited to working a little over 15 hours per week (that’s 38% of a normal work week). So I only work Mondays and Tuesdays. And I’m also back to taking early withdrawals from my retirement savings to pay the bills. I don’t
have much left after dipping into it the two years I was unable to find work when I was first let go.
On top of that, my teammate was also told to take off over 27 days without pay from mid-October until the end of the financial year (and the four days the company is closed
around Thanksgiving and Christmas do not count). So he is basically working only 42% of a regular schedule. So there isn’t much coverage at all.
Who knows what’s going to happen after the first of the year? Rumor has it on the site where employees are posting what else is happening that there could be another massive layoff between now and the end of February.
I was talking to someone in one of the security auditing groups today, and even though their work levels have not gone down, their headcount has been reduced in the past year from 40 people to 13. That could explain why it took them four months to complete a simple userid request I submitted back in July.
Even though the company publicly gave up on that “Road Map 2015” plan and the $20 EPS goal, they are still in cutting mode. I suspect they still have bonuses and stock options geared to the stock price, as they just announced that they are going to spend
another $5 Billion buying back the stock! And that’s not cash they have on hand. They’re going to BORROW the money to do that!
It reminds me of the famous line that Wimpy used to say in the old Popeye cartoons: “I’ll gladly pay you Tuesday for a hamburger today.” Only I suspect that none of the people
in Armonk plan to be anywhere in sight when Tuesday rolls around.
It’s obvious that all they are interested in is raiding all of the money possible for themselves, then they will bail, with no concern with the thousands of lives they have destroyed.
The modern day version of rape and pillage.
Meanwhile, Google announced that they will INVEST $1.2 Billion in things like space exploration, aviation, rover/robotics and other emerging technologies.
I’m in job search mode – AGAIN – and it is worse than it was for me in 2005. Of course, I’m now nine years older (I turned 59 last month). As you probably know from your own job searches, no one cares about your overall knowledge. You can only do what you’ve done the last 2, 3, or 5+ years. There is no room for learning anymore. If you didn’t do it full time, it doesn’t count.
Part of this may be that “con game” I’ve read so much about the past few years. Companies post job openings with a laundry list of unrealistic requirements, then bemoan the fact that there are
supposedly no qualified Americans for those jobs. Next they go begging the government for more H-1B visas to bring over here “skilled” workers from foreign countries. Which was their goal all along — bring in basically slave labor at the expense of the hard working and dedicated Americans.
Unfortunately I’m now singing the comedian Dennis Leary’s song “It’s a Merry F***ing Christmas”. Ho. Ho. Ho.
Considering that 70% of our current GDP consists of ‘consumption’ within the U.S., how will this situation improve our national economy? If we don’t get more people back to work in this country, how will we survive in the long run?
P.S.
Maybe it would be a good idea to get rid of that IBM stock you’ve grown so fond of.?!
